Calculated federal tax owed does not match the amount using the IRS formula!?

Question

So everything is entered correctly and my taxes are not complicated. I’ve used Taxfreeusa for years, always filing MFJ. Line 15 is “Taxable income”. The number is 82,984. Line 16 is Tax and shows $9,144.

But using the IRS formula it is $9481!!! They use the formula (as far as I can find online, unless it has changed) of 10% of the taxable income up to $23850 and 12% for the rest!  This is a huge difference of $337!!!

I already filed and discovered this afterwards. Can someone please explain?

MatthewD · Answer

Hi VirginiaPAE,

You are right about the qualified dividends being taxed at a lower rate.  When that happens your taxable income will not match the tax calculated with the IRS tax tables.  A worksheet for Longer Term Capital Gains and Qualified Dividends is used.

VirginiaPAE · Answer

Nevermind!  I’ll leave this up for anyone else that wonders the same thing. I had qualified dividends, so you DO NOT use the IRS formula on line 15, though it SEEMS like you should. My qualified dividends were taxed at a lower rate, which explained the $337 difference in my favor.